Directors and Officers Insurance Coverage – A Necessity for Condo Boards

November 2015

Condo directors are responsible for managing the affairs of the condo corporation. They are required to deal with issues relating to legislation, compliance and governance. Condo directors are responsible for decisions related to the administration, maintenance, repair and reconstruction of the property.

Condo directors, unlike their counterparts in private corporations, are volunteers who have offered up their personal time and expertise to help manage the affairs of the corporation.

Many of the decisions made by condo directors occur in an environment of incomplete information and conflicting goals. Their decisions are likely to satisfy some and disappoint others.

As with directors of private corporations, condo directors are subject to a high degree of scrutiny. So long as their decisions are made in good faith and without negligence, it is reasonable that they should not be required to risk personal assets while providing service to the corporation. Condo directors should not be held personally liable for decisions made under these circumstances.

It would be difficult, at times impossible, to find condo owners willing to serve the role of director for their corporation if personal assets were at risk. For this reason condo directors require a level of protection against personal loss.

Directors and Officers (D&O) Insurance exists to protect the personal assets of condo directors who have willingly volunteered their time to benefit their community. This coverage is intended to protect directors and officers of the corporation who may be sued while fulfilling their obligations. It protects them against accusations that they have failed to carry out their fiduciary obligations. It also provides coverage for defense costs and/or any settlements resulting from those claims.


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